Having registered a fresh all-time high of $3,896.49/oz. on Thursday, Spot Gold looked set for its seventh consecutive weekly advance, supported by expectations the Federal Reserve will continue easing its monetary policy this year and concerns over the impact of the US government shutdown.
The latter extended to a second day on Thursday and delayed crucial economic data, including Friday’s Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.
Markets are now pricing in about a 98% chance of a 25 basis point Fed rate cut in October and an 87.5% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Data by ADP showed this week US private payrolls had decreased by 32,000 in September after a revised down 3,000 drop in August.
“Overall, with a U.S. government shutdown creating uncertainty over the GDP impact, and with lower interest rates likely arriving again this month, conditions remain ripe for gold to continue marching forward,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
Spot Gold was last up 0.09% on the day to trade at $3,860.00 per troy ounce.
The precious metal has risen 2.64% so far this week.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 47.09%.
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